Baghdad, Iraq, September 03, 2023—IFC signed a flagship agreement today with the government of Iraq that will harness private sector capital and expertise to develop the country's main airport—opening the door for more private sector investment and establishing a competitive model for other critical infrastructure projects in the country.
Under the agreement, IFC, a member of the World Bank, will act as lead transaction advisor for a public-private partnership (PPP) to rehabilitate, expand, finance, operate and maintain Baghdad International Airport – the country's largest international airport – and bring its facilities, safety, and services in line with international standards.
This will be Iraq's first airport PPP project as well as IFC's first PPP mandate in Iraq. IFC will carry out detailed due diligence and recommend a suitable transaction structure for the project, building on a pre-feasibility study undertaken by the institution in 2019. Upon the government's approval, the project will move to tender stage to attract private investors and operators.
Iraq is in urgent need of infrastructure rehabilitation and enhancement. Strengthening private sector participation in the economy will be critical and this PPP will help lay the foundations for future projects to tap into private financing and expertise.
The project is also aligned with Iraq's 2030 Vision for Sustainable Development and government agenda, which both aim to introduce private sector participation for key infrastructure assets in priority sectors to create a more diversified Iraqi economy less dependent on oil revenues.
"This agreement marks the start of a series of partnerships with the private sector for critical infrastructure development across the country, as part of our 2030 economic vision for sustainable growth," said Iraq's Prime Minister Eng. Muhammad Shia' al-Sudani. "The Baghdad International Airport serves as a cultural symbol representing Iraq and its people. This initiative is an integral component of our comprehensive vision, which will encompass all airports to enhance transportation diversity and improve global connectivity."
"This agreement marks a new era in Iraqi history, allowing the country to leverage its unique geographical position, supporting trade, creating jobs, and fostering diversification," said Khawaja Aftab Ahmed, IFC's Regional Director for the Middle East, Pakistan, and Afghanistan. "PPPs help governments harness the private sector's expertise and efficiency, raise capital to build modern, sustainable infrastructure, and spur development. Attracting private sector participation will help manifest the government's vision and assist in meeting Iraq's huge developmental and financing needs."
Since 2005, IFC has committed over $1.2 billion to support Iraq's private sector, with its current committed portfolio standing at about $188 million in sectors such as energy, telecoms, and banking.
IFC has an impressive track record in PPPs with over $46 billion facilitated globally since 2004, improving access to infrastructure for more than 150 million people. IFC's PPPs in the Middle East include the groundbreaking Queen Alia Airport and the Tafila wind farm in Jordan, and the Madinah Airport and healthcare PPPs in Saudi Arabia.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
